Author Topic: Can you be a Mustachian in Silicon Valley?  (Read 6698 times)

Zedekiah

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Can you be a Mustachian in Silicon Valley?
« on: February 08, 2016, 07:18:35 AM »
Hi Mustachians,

I'm being recruited by a company to work in Silicon Valley. When I look at the cost of living in the area, I get a very sick feeling and expect MMM himself to show up at my door and slap me.

Current situation:
Engineer working in Ontario for 70k. Wife making 70k at her career as well. 1 year old baby at home. No debt aside from our mortgage and since reading MMM, we have been reducing bills and trying to max out our RRSPs with quite a bit of success. We also both work less than 20 minutes from home (I'm only 10 minutes). The way I see it, we are on a good path to financial freedom.

Proposed Situation:
Big, awesome Silicon Valley company comes knocking offering me a six figure salary and six figure stock options in USD (which is so much more than CAD right now) to come work for them. My wife may or may not be able to find a job in the area.

The move would definitely be good for my career. However, I don't feel like this move would be good for the end goal of financial freedom. Is there any way I could gain financial freedom by working in Silicon Valley?

Thanks for everyone's insight,
Zed

Ricky

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #1 on: February 08, 2016, 07:23:44 AM »
Just depends on your expenses now and what you're willing to accept when you move - and what your goals/values are.

Personally, I don't see how a cross country move with your wife not having anything lined up is going to greatly benefit you when you're already making $140k combined. Obviously these decisions aren't black and white (we can't look at numbers and make the decision for you).

AZDude

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #2 on: February 08, 2016, 08:24:56 AM »
The exact new salary is important. Run the numbers. Let math guide your decision.

somepissedoffman

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #3 on: February 08, 2016, 09:24:48 AM »
The answer is a solid 'maybe'.  As others said, run the numbers.  If your rent will increase by say $1500/mo, then there exists a combined family salary increase that justifies it.  My gf and I came out ahead moving here, superior job opportunities for both of us, and we managed to find the cheapest 1 bedroom apt in all of Mountain View, but there are definitely cases where people do not come out ahead moving here.
Definitely look into the job market for your wife's profession, that may influence the decision.

Bay Area is kind of a sprawling mess, but we do fine w/ one car, bike infrastructure is great, and public transportation is solid.

InFlagranteDelicto

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #4 on: February 08, 2016, 11:27:38 AM »
There is a growing number of SV employees living in vans or small mobile homes at the companies they work at. The bigger companies have 24 hour gyms, showers, and employee canteens so you can end up living dirt cheap while pulling down a good income. No commute sounds good too.

Cathy

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #5 on: February 08, 2016, 11:44:49 AM »
Big, awesome Silicon Valley company ... six figure salary and six figure stock options in USD...

As the others have mentioned, you need to consider the specific numbers involved. I write separately to make two observations.

First, I don't understand why people on this forum seem to assign a mystical and reverent significance to "six figure salaries". There is a huge range of six figure salaries. It covers everything from $100,000 per year to $999,999 per year. There is a factor of 10 difference between those two numbers. The fact that the integer component of an annual salary contains six figures does not mean that your eyes should go watery and you throw all logic out the window. Instead, you should treat it like any other salary and look at the specific numbers involved.

Second, "big, awesome Silicon Valley compan[ies]" typically do not offer "stock options" to ordinary engineer employees. They generally offer restricted stock units ("RSUs"), which, after the first year of employment, are essentially equivalent to a quarterly cash bonus determined by the market value of the company on the vesting dates (although usually settled in shares rather than cash). That said, the details vary by company, so you need to read the specific documents you are presented with. Do not confuse RSUs with restricted stock or with stock options, since they are very different. You cannot figure the value of your compensation package if you do not understand what you are being offered.
« Last Edit: February 08, 2016, 11:47:45 AM by Cathy »
This post contains only general information on the issues raised by this topic. This post does not provide help tailored to your specific situation. There are many facts that could be relevant to your specific situation and I am not in possession of those facts. If you need help tailored to your specific situation, you should retain an appropriate professional and not rely on this post.

Eric

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #6 on: February 08, 2016, 05:02:06 PM »
I assure you that your wife can find a job here.  The area ecomony is really strong.  For reference, see Rents, Apartments.

If you can figure out the housing thing, then everything else is pretty cheap.  Very low utility costs, as A/C isn't needed and heat barely is needed.  Food is pretty cheap, as it's grown nearby.  Tons of outdoor activities.  Very bike friendly.  That housing though, that's the tough part.
"Compound interest is the most powerful force in the universe."  -- Einstein

msjd123

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #7 on: February 08, 2016, 05:11:11 PM »
I assure you that your wife can find a job here.  The area ecomony is really strong.  For reference, see Rents, Apartments.

If you can figure out the housing thing, then everything else is pretty cheap.  Very low utility costs, as A/C isn't needed and heat barely is needed.  Food is pretty cheap, as it's grown nearby.  Tons of outdoor activities.  Very bike friendly.  That housing though, that's the tough part.

Exactly this. If housing is too high, people move farther away, but that increases commute time and associated commuting expenses unless you can live close to public transport. Public transportation isn't the best, though -- I would imagine you'd be sorely disappointed if you counted on using it in lieu of a car.

WSUCoug1994

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #8 on: February 08, 2016, 05:48:26 PM »
From a money standpoint - you need need to do the math to see if it makes sense.  You WILL take a quality of life hit - which my wife and I have decided it is worth it in the near term to reach FIRE faster.  I make more money here than I would anywhere else and we don't plan on retiring here.  Living here gives me access to a tremendous economy and limited travel - which is the quality of life exchange we make as a family. 

ulrichw

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #9 on: February 08, 2016, 05:52:17 PM »
[...]
The move would definitely be good for my career. However, I don't feel like this move would be good for the end goal of financial freedom. Is there any way I could gain financial freedom by working in Silicon Valley?
[...]

Given that your (and your wife's) career is your path to financial freedom, to some extent what's good for your career is good for your financial freedom.

If you're in Software being here in Silicon Valley is good not only for short term reasons (i.e., the current job offer you have) but also for longer term - in case something happens, there are a lot more options.

Furthermore, there are options (no pun intended) for very short-term financial independence: Become an early employee at the right start-up, and you could get your FI in 3-5 years. (Note that there's a huge element of luck involved here - no guarantees)

I agree with other posters - the specifics matter - If your salary by itself isn't going to at least replace both of your salaries combined, I would reject it outright. If your salary will be greater than what the two of you make today, then run the numbers - look at rents in the area where your job would be, consider schools and cost of private education if need be.

I'm assuming your wife is willing to uproot her career - will she want to try to resume here? Check job listings in her field. As Eric mentioned, the local economy is good, but that doesn't mean that all kinds of jobs are readily available.

In terms of COL - most general living expenses are not too much higher than other areas. Housing is the one thing that's completely out of proportion. This does mean some housing-related items are also inflated - e.g., cost of any housing-related service (plumbing, renovation, etc.). Also childcare/private education are quite expensive. CA has relatively high taxes, which will take a chunk out of that compensation package.

Nonetheless, in Software there's no better place to be (there's a reason the housing prices have been driven up so high), and the gains usually will more than offset the higher costs, especially if you look at the development of your career over a few years. Keep your expenses under control, and you should do quite well. If you get lucky and manage to ride a rocket, you won't even have to worry about keeping your expenses under control :)

wwweb

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #10 on: February 08, 2016, 05:58:00 PM »
Sure you can - it just takes a little creativity. One option is to live on a house boat:
http://www.providencejournal.com/article/20150712/NEWS/150719956

Another option to deal with high housing costs would be to live in an RV.

This probably seems a little crazy, but think of the money you'd save and the stories you'd be able to tell later in life.

ender

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #11 on: February 08, 2016, 06:05:25 PM »
Do the math.

You currently make $140k combined. You are moving for an unknown amount of money and a guaranteed increase in expenses. Presumably you will increase nearly all expenses (traveling home, healthcare, living expenses).

First, I don't understand why people on this forum seem to assign a mystical and reverent significance to "six figure salaries". There is a huge range of six figure salaries. It covers everything from $100,000 per year to $999,999 per year. There is a factor of 10 difference between those two numbers. The fact that the integer component of an annual salary contains six figures does not mean that your eyes should go watery and you throw all logic out the window. Instead, you should treat it like any other salary and look at the specific numbers involved.

Yeah this bothers me too. Especially in Silly Valley, the answer to this question about whether it's a good idea depends significantly on whether it's $110k vs $150k or $200k salary.

msilenus

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #12 on: February 08, 2016, 06:24:00 PM »
Sounds like you'd probably be making about $200k USD over here, up from $140k CAD == $100k USD?

If so, I suspect it works if you aggressively manage down housing expenses and stick to 1-BR or maybe 2-BR.

If your wife would be making ~$70k here, then it might not make sense for her to work.  Figure ~50% tax rate (California + AMT + payroll) leaves only $35k.  Childcare takes another large bite, and you're going to be less frugal for having both spouses working. Would keep her skills sharp though, and maybe she can earn more.

But even so, and assuming a conservative ~50% tax rate on your second $100k of income (the dollars above your current baseline salary) leaves $50k in new takehome.  That pays twice what a 1BR apartment would cost in Mt. View, so you look like you're coming out way ahead.

The problem comes in a few years when the kid is getting ready to enter kindergarten.  Do you uproot and head back North while it's still relatively easy to leave, or commit to the SV area, or plan on leaving later when it's harder?  If the first is definitely on the table, and you can live in a small apartment happily, then I think it makes a lot of sense to give it a try and see how things feel in a few years.  If you feel like you'd be committed to the area with a four year old who hasn't entered K yet, and would need to pay the premium for the best public or private schools, then you're likely to give back all the extra money you made and more.
« Last Edit: February 08, 2016, 06:31:58 PM by msilenus »

aFrugalFather

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #13 on: February 08, 2016, 08:47:00 PM »
Sure you can - it just takes a little creativity. One option is to live on a house boat:
http://www.providencejournal.com/article/20150712/NEWS/150719956

Another option to deal with high housing costs would be to live in an RV.

This probably seems a little crazy, but think of the money you'd save and the stories you'd be able to tell later in life.

I'd be scared to raise a baby on a house boat, the chance for mistakes if they get out of your sight would keep me up at night.

aFrugalFather

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #14 on: February 08, 2016, 08:49:41 PM »
Hi Mustachians,

I'm being recruited by a company to work in Silicon Valley. When I look at the cost of living in the area, I get a very sick feeling and expect MMM himself to show up at my door and slap me.

Current situation:
Engineer working in Ontario for 70k. Wife making 70k at her career as well. 1 year old baby at home. No debt aside from our mortgage and since reading MMM, we have been reducing bills and trying to max out our RRSPs with quite a bit of success. We also both work less than 20 minutes from home (I'm only 10 minutes). The way I see it, we are on a good path to financial freedom.

Proposed Situation:
Big, awesome Silicon Valley company comes knocking offering me a six figure salary and six figure stock options in USD (which is so much more than CAD right now) to come work for them. My wife may or may not be able to find a job in the area.

The move would definitely be good for my career. However, I don't feel like this move would be good for the end goal of financial freedom. Is there any way I could gain financial freedom by working in Silicon Valley?

Thanks for everyone's insight,
Zed

I'd like to see the numbers and know what area too, also depends if you think you are ok with a bit of a commute to trade $ for convenience of living nearby.  If you are in the heart of SI then housing can be crazy.  Depends also on what you are used to.  Asides from housing though I think the bay area is given a bad reputation on cost of living, you can get by here on the cheap if you have the right mind set. 

dinkhelpneeded

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #15 on: February 08, 2016, 10:42:53 PM »
Here are my thoughts, and I live here.

If the idea is to FIRE much sooner, I would say its not AS EASY or AS FAST as it seems, but its definitely do-able if you take a quality of life hit over the next 5-7 years

  • 200K is NOT a lot of money in Silicon Valley if you are looking to get in and out ASAP, your tax basis gets higher, plus state taxes. This sounds terrible to typical MMM folk, but its something I wish somebody told me. It does help save faster than other areas, but maybe not as fast as YOU EXPECT.
  • Even at extreme frugality (1BR/studio, bare bones existence) expect to pay 70K (post tax) in living expenses with a kid with no daycare, which is 100K pre-tax income,  especially if you are renting. If you want to go lower, then you will have to share a home
  • Remember RSU's are only worth something, if prices go up, and they probably vest a certain % yearly.
  • Daycare is expensive, you can seek out cheap options, but chances are you will not like it.
  • Almost everyone is running around like a headless chicken, making $, raising kids, cooking eating sleeping, social gatherings and even living in a residential area is a luxury.

Here are my suggestions
  • If your wife can work - YOU HAVE HIT THE JACKPOT! I cannot reiterate this enough. If your wife can make 100K or even 120K, you can live on this income and save all of your income.
  • If you are set on one income ONLY then, please ONLY move here with atleast 200K in down payment for a potential home. Renting gets old really quick! I would still do it, but it makes your current existence quite miserable. If you are willing to share a home, then that is also a great option
« Last Edit: February 08, 2016, 10:53:17 PM by dinkhelpneeded »

msilenus

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #16 on: February 08, 2016, 11:46:53 PM »
  • Even at extreme frugality (1BR/studio, bare bones existence) expect to pay 70K (post tax) in living expenses with a kid with no daycare, which is 100K pre-tax income,  especially if you are renting. If you want to go lower, then you will have to share a home

50k should be very doable without hardship, and 60k easy.  We'd be at about 65k in a $2k/mo apartment w/o childcare (we're neither.)  About 20k of our budget is slop and fun money, with a fair amount of room for cutting in the rest.

Your point about vesting schedules is extremely important.
« Last Edit: February 08, 2016, 11:49:12 PM by msilenus »

Freeme

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #17 on: February 09, 2016, 12:35:25 AM »
I live in Silicon Valley and the commutes are long and rent and housing is crazy. Rent is about 2700 and up. Starter homes are 650,000 with taxes at almost $1000 per month. The weather is beautiful and you can get a high paying job but it comes at a cost. Really look into what it would take to live here.

FINate

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #18 on: February 09, 2016, 12:42:38 AM »
  • Remember RSU's are only worth something, if prices go up, and they probably vest a certain % yearly.

That's only true for options (uncommon these days). RSUs will be worth slightly less if prices go down, but they also have less potential upside.

FINate

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #19 on: February 09, 2016, 12:50:46 AM »
It's possible, I FIREd working in SV. But I also purchased my home in 2003 AND got lucky and joined the right company at the right time.

As others have said, do the math. Estimates are that you need $168,000 annual income to purchase the median home in the South Bay, and I'm guessing that is just squeaking by. Personally, I would not plan on staying in SV for the long term without owning or a rent controlled apartment.

http://ww2.kqed.org/news/2015/03/09/you-need-to-earn-142000-dollars-to-buy-a-home-in-san-francisco

dinkhelpneeded

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #20 on: February 09, 2016, 05:00:41 AM »
  • Even at extreme frugality (1BR/studio, bare bones existence) expect to pay 70K (post tax) in living expenses with a kid with no daycare, which is 100K pre-tax income,  especially if you are renting. If you want to go lower, then you will have to share a home
Quote
50k should be very doable without hardship, and 60k easy.  We'd be at about 65k in a $2k/mo apartment w/o childcare (we're neither.)  About 20k of our budget is slop and fun money, with a fair amount of room for cutting in the rest.

I would try to make a trip to the area alone and look at apartments and areas around your work place. A lot of places look nice on Craigslist, but are awful in person, or neighborhoods can be questionable.

65K is do-able without childcare but its hard to sustain over 4-5 years, when your kid needs to go to school, or when everyone around you is in a home, easier to entertain people at home, when people come to visit etc. Also neighbors in apartments can be a hit or miss. I am not saying its not do-able, and its probably a part of "lifestyle inflation" but what you take for granted in other places(good schools, nice neighbors, nice parks), you will NOT get in the bay area unless you pay a premium for it.


Think

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #21 on: February 09, 2016, 05:15:21 AM »
I would do it for the career advancement.

I moved to NY for a finance job after college and didn't even make that much money. It seriously launched my career and I make way more money than had I stayed in my former city.  I say go for it. 

Worst case scenario you'll increase your salary and can look for another job in a lower col city in a few years. 

At the end of the day, making a high salary makes it a lot easier to save.  My husband and I pull in close to 400k.  It's a game changer.  Besides not really paying any taxes on a salary less than 100k in the US it's a lot harder to save. 

Sure housing might be expensive but try and live with one car or none at all.  And remember certain things are the same price or similar regardless of where you live on the US. 

CanuckExpat

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #22 on: February 09, 2016, 11:09:38 AM »
Here are my thoughts, and I live here.

If the idea is to FIRE much sooner, I would say its not AS EASY or AS FAST as it seems, but its definitely do-able if you take a quality of life hit over the next 5-7 years

  • 200K is NOT a lot of money in Silicon Valley if you are looking to get in and out ASAP[/u], your tax basis gets higher, plus state taxes. This sounds terrible to typical MMM folk, but its something I wish somebody told me. It does help save faster than other areas, but maybe not as fast as YOU EXPECT.

I don't agree with the bolded parts. You shouldn't have to suffer nor take a quality of life hit to live here while making a higher income. We live here, and I think we have an awesome life, most of the people we meet seem to have pretty good lives too. Perhaps we have different definitions of quality of life?

It's true that there are people and households making more than $200,000, but the median household income for Santa Clara County is a little under ~$100,000 and that's one of the highest median incomes in the country.
I mean certainly you can find other parts of the country that are cheaper to live in, and where you can make $200,000 household, so if you only want to maximize savings, that is the way to go. But we can't say $200,000 is not a lot of money...
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dinkhelpneeded

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #23 on: February 09, 2016, 11:21:20 AM »
Here are my thoughts, and I live here.

If the idea is to FIRE much sooner, I would say its not AS EASY or AS FAST as it seems, but its definitely do-able if you take a quality of life hit over the next 5-7 years

  • 200K is NOT a lot of money in Silicon Valley if you are looking to get in and out ASAP[/u], your tax basis gets higher, plus state taxes. This sounds terrible to typical MMM folk, but its something I wish somebody told me. It does help save faster than other areas, but maybe not as fast as YOU EXPECT.

I don't agree with the bolded parts. You shouldn't have to suffer nor take a quality of life hit to live here while making a higher income. We live here, and I think we have an awesome life, most of the people we meet seem to have pretty good lives too. Perhaps we have different definitions of quality of life?

It's true that there are people and households making more than $200,000, but the median household income for Santa Clara County is a little under ~$100,000 and that's one of the highest median incomes in the country.
I mean certainly you can find other parts of the country that are cheaper to live in, and where you can make $200,000 household, so if you only want to maximize savings, that is the way to go. But we can't say $200,000 is not a lot of money...

I qualified my statement saying 200k is not a lot if you are looking to get in and out quickly. Its definitely more than enough to live on and even save, but if you think you are going to save 75% of that base pay income say 100K, like most mustachians, you might be in for a surprise, especially with kids.

We can agree to disagree on quality of life, since its all relative anyway :) (Also I'm not the only one who said that ^^ WSUCoug1994 and FreeMe said so too in their comments above.
« Last Edit: February 09, 2016, 11:46:42 AM by dinkhelpneeded »

cats

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #24 on: February 09, 2016, 11:54:24 AM »
I agree, $200k may not be as impressive a household income as it is in other parts of the country, but it is still a pretty substantial income and it is certainly enough for me to feel "rich" 99% or so of the time.  Last year my husband and I had a total household spending of about $36k, and no, we do not live in a camper van.

I suspect the big challenges you are going to run into are:

-Housing is expensive
-Childcare is also expensive (we are about to add a baby into the mix and for the daycares we have looked at so far, we'd be paying $15-20k/yr.  Demand is high so we may not initially have the option of going with a cheaper daycare, although hopefully we would be able to get into one eventually!).
-Your wife may or may not be in a profession where being in Silicon Valley adds a premium to her income, so you need to consider whether your Silicon Valley premium will be enough to make it "worth it" for your whole family.  If she's also an engineer, you guys could really start raking it in, if she isn't...you need to do some research.
-The weather here is so much nicer than in Canada, you may not want to move back...which may increase the size of stash you require to FIRE.

Some areas where you may encounter savings or be able to mitigate:

-you are unlikely to need heating or AC very much (if at all), I am guessing this is not the case in Ontario.  Our gas/electric bill is typically $25-50/month in a 2-bedroom apartment. 
-Not sure what housing sizes are like in your part of Ontario, but my experience with bay area vs. less developed parts of US is that more small housing options tend to be available, so if you are willing/able to move into a smaller space you may take less of a hit on housing costs (you will also have less housecleaning to do and less crap to maintain!).  It's also pretty common for young affluent families to live in apartments rather than owning homes here--most people will not look down on you for not owning a 3-bedroom house (or maybe I just tell myself this as we are still renting...)
-the weather is nice year-round and there are decent public transit networks, so if you pick the right spot to live, it's conceivable that one or both of you could walk/bike/public transit commute to work.  If you are currently a two-car family, you might be able to drop down to one car, if you currently manage with one car you can probably cut your driving considerably or perhaps even ditch the car completely.  Neither my husband nor I have ever had to deal with a car commute since we've moved here.
-Groceries are likely to be cheaper than in Canada.  From a recent visit to Vancouver + comments I've seen on these boards, it seems likely you could cut grocery costs in half easily.
-Lots of great parks, bike trails, hiking, etc. so if you are into the outdoors your "entertainment" can be largely free. 

mm1970

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #25 on: February 09, 2016, 12:05:21 PM »
Do the math.

You currently make $140k combined. You are moving for an unknown amount of money and a guaranteed increase in expenses. Presumably you will increase nearly all expenses (traveling home, healthcare, living expenses).

First, I don't understand why people on this forum seem to assign a mystical and reverent significance to "six figure salaries". There is a huge range of six figure salaries. It covers everything from $100,000 per year to $999,999 per year. There is a factor of 10 difference between those two numbers. The fact that the integer component of an annual salary contains six figures does not mean that your eyes should go watery and you throw all logic out the window. Instead, you should treat it like any other salary and look at the specific numbers involved.

Yeah this bothers me too. Especially in Silly Valley, the answer to this question about whether it's a good idea depends significantly on whether it's $110k vs $150k or $200k salary.
Yep, I am mid-career (by a traditional definition) and I wouldn't go there for anything less than about $160k, and that's only if my husband were getting over $200k.

Eric

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #26 on: February 09, 2016, 12:57:27 PM »
-The weather here is so much nicer than in Canada, you may not want to move back...which may increase the size of stash you require to FIRE.

Cannot be emphasized enough.  It's in the mid-70s today.  (~23C)  In February.  A bit of an anomoly, but still.  Even when it's cold, it essentially never gets below freezing.

Those of you talking about quality of life being less must be completely oblivious to what the rest of the hemisphere has to deal with for most of the year.  If living in a smaller space decreases quality of life (dubious claim to me), then being able to go outside in mid-February in shorts should definitely help offset that.

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mm1970

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #27 on: February 09, 2016, 01:32:56 PM »
-The weather here is so much nicer than in Canada, you may not want to move back...which may increase the size of stash you require to FIRE.

Cannot be emphasized enough.  It's in the mid-70s today.  (~23C)  In February.  A bit of an anomoly, but still.  Even when it's cold, it essentially never gets below freezing.

Those of you talking about quality of life being less must be completely oblivious to what the rest of the hemisphere has to deal with for most of the year.  If living in a smaller space decreases quality of life (dubious claim to me), then being able to go outside in mid-February in shorts should definitely help offset that.
Quality of life is an interesting concept, and it varies by the person.

I don't live in SV, but do live in Santa Barbara - so, think - similar cost of living (a little less these days), similar weather, better traffic, but lower salaries.

I feel that our quality of life here is good - I will go for a walk on my lunch break, and it's in the 80s.  We went to the beach this weekend.  My kids play outdoors at school and childcare, all year long.  The availability of fresh food is amazing, and much of it local.  It's easy to eat healthfully.

But...my <1150sf  house was almost $800k, and in a crappy school district.  The school district issue is a big one - we transferred from a bad one to a slightly less bad one.  So, in addition to living in a house that most people would consider small (and we don't have a garage, and it's in a small city lot), we have to contend with the school district.  This requires both money AND time.

And for most people, living here doesn't leave "extra".  As my office mate and I discuss regularly - if we were living almost anywhere else (you know, not California) - we could afford - bigger homes, nicer cars, a boat, nice vacations - AND savings.  And that's one thing that people mean when they talk about "quality of life" in CA being poor. 
-Even with high incomes, you can't spend money on EVERYTHING that you want
-Traffic (less of an issue for me, but I gather bad for SV)
-Workload - I can't say, because I know know - but are the work expectations higher in SV because of the salaries?  Are you making $200k for 40 hours a week, or is it 50 or 60?  That's a big quality of life difference there.

For us, quality of life is different.  Yes, I'd love a slightly bigger house in a better school district, but I love my neighbors and neighborhood.  I can walk to the beach in under 30 minutes (it's 1.5 miles to the closest beach, 1.8 miles to the nearest county park beach - so that's more like 40 minutes).  Hiking, biking, beach - these are all great quality of life things that we have.  That's what I value.

Sure I could move to a cheaper place, have a bigger house, better schools, more snow, and less access to fresh local produce year round.

tobitonic

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #28 on: February 09, 2016, 09:19:55 PM »
My kids play outdoors at school and childcare, all year long.

As a Midwesterner, I'd like to point out that this has more to do with school policies (or teacher prejudices) than weather. In my public school in Illinois, our lower limit is 25 degrees, which means we miss probably about 10-20 outside days per school year (I religiously take my school kids out because I believe it's one of the most valuable things I can teach them each day). However, the majority of teachers in my building stop taking their kids out when temperatures drop below around 50 in October and don't come back out until they break 50 or so in March. Personally, I find it ridiculous and feel sorry for their children.

On the opposite end, in the Montessori private school just a few miles away, they go out down to zero degrees (I wish we could too!), which means they go out almost all year long. Fifty, 25, zero, depending on whether your child has a teacher or school system that values outside time or not. In more northern states the weather limits are even more extreme (I've heard of -15 in Minnesota and Alaska), and it's similar in Scandanavian countries.

Whether we'd like our kids playing outside in those temperatures is a separate issue (I took my 2-year-old out sledding in -4 weather a few weeks ago, and there were many other parents and kids out that day too!), but it's important to note that cold weather doesn't have to be a deterrent unless we let it.

I don't mean to take the thread off topic; this just stood out to me as someone from a climate with all four seasons. :D
« Last Edit: February 09, 2016, 09:32:08 PM by tobitonic »

obstinate

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #29 on: February 10, 2016, 11:32:40 PM »
For mustachianism, two things matter*.

1. Your attitude about consumption.
2. How much you are netting out.

(1) allows you to maintain a relatively frugal stance, even in this area. It also enables you to consider leaving once you've made your nest egg. (2) it is possible to net out very well here. We save a significant chunk of change each year -- multiple times what the average American grosses.

Even if you're only being hired in at $130-150, you will still probably not more in absolute terms than you do anywhere else. The important thing to be aware of is that you won't be able to stay. Being here is like owning a very expensive pick up truck for work. It's fine while you're working, but you better sell it and buy a civic after you retire.

*Not an exhaustive list, just the things that matter in this situation.

obstinate

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #30 on: February 10, 2016, 11:41:45 PM »
Even at extreme frugality (1BR/studio, bare bones existence) expect to pay 70K (post tax) in living expenses with a kid with no daycare
What. This is not near accurate. Broad strokes, with a 1BR, you can expect something like:

- Rent: $3k (Liberal estimate. There are plenty of 1BR for less in MTV.)
- Food: $700 (Liberal)
- Vehicle: $200 (Rough rough guess. Vehicle is noise for us.)

You're talking about 50k barebones. Unless we're talking about a studio in the most desirable neighborhoods of SF.

CanuckExpat

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #31 on: February 10, 2016, 11:54:10 PM »
I agree, $200k may not be as impressive a household income as it is in other parts of the country, but it is still a pretty substantial income and it is certainly enough for me to feel "rich" 99% or so of the time.  Last year my husband and I had a total household spending of about $36k, and no, we do not live in a camper van.

Even at extreme frugality (1BR/studio, bare bones existence) expect to pay 70K (post tax) in living expenses with a kid with no daycare
What. This is not near accurate. Broad strokes, with a 1BR, you can expect something like:

- Rent: $3k (Liberal estimate. There are plenty of 1BR for less in MTV.)
- Food: $700 (Liberal)
- Vehicle: $200 (Rough rough guess. Vehicle is noise for us.)

You're talking about 50k barebones. Unless we're talking about a studio in the most desirable neighborhoods of SF.

To add to the data points, our spending the last two years has been about $50k-$55k and we live a pretty luxurious and often wasteful life.
So yes, I think some of the minimum costs are being overestimated in this thread, but to each their own. Granted, our annual expenses would be about $10k-$15k or so higher with full time childcare.
« Last Edit: February 10, 2016, 11:59:01 PM by CanuckExpat »
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kasperle

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #32 on: February 11, 2016, 08:42:03 AM »
Hey OP,

I'm going through a very similar move right now! I'm moving from an ultra-LoC city, Philadelphia, to the heart of the valley. I've accepted the job, and the move is in 3 weeks.

Although I'm not sure if it'll be an all-around good idea (I'll have to live it to find that out, I think!), I am confident that it'll be fine on the financial side of things.

To gain that confidence, I took these considerations into account:

1. Price of housing. I tried to find an upper limit of what I'd be willing to pay to see if the finances made sense. I dug around on Craigslist to see what some possibilities were. The closest, largest city to my work is San Jose, and decent places ran for $3.5k/month. So I ran all of my calculations with that as the most that I'd be spending. With those numbers, the finances worked out.

However, a nearby town that has slightly less going on has nice places for $2,500, so I'm likely to live there. It's just a few miles from San Jose, which just sounds like a great bike ride when I want to do something in San Jose. If this works out, it'll save me $12k/yr and earn me a few more bike rides, which sounds great to me.

2. Covering CoL for SO. Like you, my SO won't have a job when we move. So I calculated our shared expenses and an amnt of money that she could put into her own retirement, and saw if that worked out. It did.

3. Other inflated costs. I don't think that the price of food or anything will be drastically different. I already don't eat out a lot, so I expect to spend about the same. But just for fun I assumed a 2x leap in costs, and that still worked out.

4. Increased taxes. I wrote some calculators (that aren't hosted on a website anywhere atm) to calculate deductions from any paycheck using the documents that the state and federal governments post each year. It's within 1 cent at my current job, so that single data point gives me some confidence that the formulas are at least somewhat reliable. I made sure that the increased taxes wouldn't rob me of so much money that it wouldn't be worth the move.

For me, these considerations still left me saving a substantial amount over my current savings, although my rate of savings has decreased. Because I also want to move there, save, then leave, I'm hopeful that it won't affect my overall time to retirement.

msilenus

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #33 on: February 11, 2016, 06:58:02 PM »
It's just a few miles from San Jose, which just sounds like a great bike ride when I want to do something in San Jose.

This will never happen.

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #34 on: February 11, 2016, 08:25:02 PM »
It's just a few miles from San Jose, which just sounds like a great bike ride when I want to do something in San Jose.

This will never happen.

LOL!

Hey man, there are Sharks games, and, and... probably something else!
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Re: Can you be a Mustachian in Silicon Valley?
« Reply #35 on: February 11, 2016, 08:44:54 PM »


3. Other inflated costs. I don't think that the price of food or anything will be drastically different. I already don't eat out a lot, so I expect to spend about the same. But just for fun I assumed a 2x leap in costs, and that still worked out.



It sounds like you've worked it out very conservatively, so I won't quibble with your conclusion that the budget will work; it sounds like it totally will. But, yes, groceries are higher and gas are way higher. The grocery thing just confounds me. I'm quite familiar with SoCal food prices, but every time I visit the exact same grocery chain in the Bay Area, everything costs more. Sometimes it's a few cents, other times, much more. And gas: If it's $2.69 in LA, it'll be near $3.00 in the Bay Area. Nuts.

CanuckExpat

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #36 on: February 11, 2016, 09:32:13 PM »
It's just a few miles from San Jose, which just sounds like a great bike ride when I want to do something in San Jose.

This will never happen.

I saw that.. I didn't want to break it to him :)

In all seriousness, there are things that happen though. I caught a decent free outdoor concert at SJSU, there are the bike party rides, a few art galleries and museums. Ok I'm streching myself to think of more :)
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NoraLenderbee

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #37 on: February 12, 2016, 12:53:15 PM »
However, a nearby town that has slightly less going on has nice places for $2,500, so I'm likely to live there.

What town?

It's just a few miles from San Jose, which just sounds like a great bike ride when I want to do something in San Jose.

This will never happen.

LOL.

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #38 on: February 12, 2016, 01:15:45 PM »

It sounds like you've worked it out very conservatively, so I won't quibble with your conclusion that the budget will work; it sounds like it totally will. But, yes, groceries are higher and gas are way higher. The grocery thing just confounds me. I'm quite familiar with SoCal food prices, but every time I visit the exact same grocery chain in the Bay Area, everything costs more. Sometimes it's a few cents, other times, much more. And gas: If it's $2.69 in LA, it'll be near $3.00 in the Bay Area. Nuts.

It sounds believable, but I had to check it out and gasbuddy.com disagrees.
As of today, the price comparison for a gallon of regular are:
                 LA              SJ
average     2.56          2.36
lowest       2.15          1.91

I'm filling up for $1.99 at costco in the bay area and I just can't believe how low prices have fallen.

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #39 on: February 12, 2016, 04:21:33 PM »


3. Other inflated costs. I don't think that the price of food or anything will be drastically different. I already don't eat out a lot, so I expect to spend about the same. But just for fun I assumed a 2x leap in costs, and that still worked out.



It sounds like you've worked it out very conservatively, so I won't quibble with your conclusion that the budget will work; it sounds like it totally will. But, yes, groceries are higher and gas are way higher. The grocery thing just confounds me. I'm quite familiar with SoCal food prices, but every time I visit the exact same grocery chain in the Bay Area, everything costs more. Sometimes it's a few cents, other times, much more. And gas: If it's $2.69 in LA, it'll be near $3.00 in the Bay Area. Nuts.

Grocery chains are generally a terrrrrrrible place to shop in the Bay Area, but there are lots of non-chain options that offer good prices.  Example, I just went to a local produce place and walked out with a large backpack full of produce (bell peppers, tomatoes, cabbage, carrots, onions, eggplant....and okay, a fancy bagel) for $10.11 (should have skipped the bagel, clearly).

If we were shopping somewhere like Safeway, it would absolutely be more expensive, but you definitely don't have to shop at Safeway!

GreenQueen

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #40 on: February 12, 2016, 06:44:50 PM »
Definitely do the math, and anticipate spending too much time in your car(s) because transit is a joke unless everything is perfectly aligned. I lived and worked there for 15 years before moving to Canada. I do agree that your wife can probably find work easily, because there's so much cash there.

Think about all extra expenses, especially health care, day care, car care, rent, and how much you'll spend on outings, even thrifty jaunts to the redwoods, beaches, SF, etc, because there's no point in being out there and not taking advantage of the admittedly stunning beauty of the place.

I won't even get into quality of life, or lack thereof.  It has become quite harried there. I don't recommend the move but good luck in any decision you make.

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #41 on: February 13, 2016, 06:03:05 PM »
As a Canadian living in the San Francisco Bay Area, I can assure you that it's easy to come ahead by moving here despite the ridiculous cost of living.  That being said, it boils down to the specifics of your situation.  There is about half a dozen of cost of living calculators online and they are all good enough for what you are trying to do.  Look at Pad Mapper and at livelovely.com to double check on the housing options.  Public transit is not great, but it's good enough in many cases.  I only have a bike and I rent a zipcar about 4 or 5 times a year when I need to go where there are no transit options at all.  Frankly, besides housing, almost everything is cheaper here, especially booze, which never cease to put a smile on my face.

Ask questions about the relocation package and the help you will receive for immigration.  This stuff if worth a lot of money and will save you many headaches.  You also have the option of moving under two different visa types.  Pick the right one based on your goals.

Based on the limited information you provided, I feel like it's very likely that this will be a good move for you.  Also, remember that you can move back after a year with pretty much no penalty so why not give it a try and see if you can make it work?

CanuckExpat

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #42 on: February 16, 2016, 02:31:07 AM »
I live in Silicon Valley and the commutes are long and rent and housing is crazy. Rent is about 2700 and up. Starter homes are 650,000 with taxes at almost $1000 per month. The weather is beautiful and you can get a high paying job but it comes at a cost. Really look into what it would take to live here.

From a money standpoint - you need need to do the math to see if it makes sense.  You WILL take a quality of life hit - which my wife and I have decided it is worth it in the near term to reach FIRE faster.  I make more money here than I would anywhere else and we don't plan on retiring here.  Living here gives me access to a tremendous economy and limited travel - which is the quality of life exchange we make as a family.

I won't even get into quality of life, or lack thereof.  It has become quite harried there. I don't recommend the move but good luck in any decision you make.

We can agree to disagree on quality of life, since its all relative anyway :) (Also I'm not the only one who said that ^^ WSUCoug1994 and FreeMe said so too in their comments above.

So for the reduced quality of life people, I'm really curious about the specifics that make you think you have to take a hit in quality of life to live in the Bay Area. Examples would be great because I do think I'm generally oblivious and clueless, so I'd like to know what I'm missing, or not missing, in terms of reduced quality of life.

I was reminded of this topic reading the thread If you're saving lots of money and waiting on happiness, you're doing it wrong! and I generally agreed with it. Are we talking about the same thing and disagreeing about the small things?
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WSUCoug1994

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #43 on: February 16, 2016, 09:17:07 AM »
IMO "Quality of Life" is subjective.  What it means to me is the percentage of income required to live at the level that I am comfortable living.  Let me give you a real world example.  I live in a ~2000 sqft townhouse in Mountain View.  I am in a decent, not great, area as I am 1 block off of El Camino (high traffic, somewhat unsafe and loud).  I bought this new construction townhouse for $680,000 in 2004.  I pay around ~.80% in property taxes on a house that is now valued at $1.5M 10 years later.  I have no yard, no deck and shared walls on both sides.  This is 2000 vertical sqft as we have five levels - yes five.  I came from a 4200 sqft home (clearly too much but that's not the point) in Seattle which cost me $299,000 that was on 1/2 acre, three car garage in a gated community. 

I don't know the exact numbers but lets assume that EVERYTHING here is more expensive: food, gas, car insurance, home insurance, utilities, INCOME TAX, etc.  I don't have earthquake insurance and I probably should.  They get you coming and going which is crazy as I have a wakeboard boat (I know not very MM of me) and I have to pay unsecured property tax on my boat (yes that is a thing) of $600 a year on top of licensing fees.  The only positive I have found from a cost perspective is that alcohol is cheaper in CA than WA - yeah me!

Now California clearly beats Seattle in the weather category BUT it has little convenience for the outdoors things I like to do.  Seattle offers snow skiing/snow boarding, wake boarding, hiking/mountain biking all within a stones throw of my old house.  Here any decent lake with the exception of the Delta (relatively gross but has great calm water) is 2+ hours away.  Tahoe - 3.5 hours away WITHOUT traffic.  Mountain Biking isn't bad but isn't 15 minutes away like it was in Seattle.  I will certainly give the Bay Area a thumbs up for road biking - I have some great riding literally as I walk out of my front door which I didn't have in WA.

I think it is all relative but my personal quality of life has taken a huge hit.   More money goes to everyday living in what many would agree is a less comfortable lifestyle.

Now to be fair - I make more money here.  I commute less and I found my wife in CA.  That was a huge win.  But your dollar clearly goes a shorter distance here than most places.
« Last Edit: February 16, 2016, 09:26:25 AM by WSUCoug1994 »

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #44 on: February 16, 2016, 05:32:44 PM »

It sounds like you've worked it out very conservatively, so I won't quibble with your conclusion that the budget will work; it sounds like it totally will. But, yes, groceries are higher and gas are way higher. The grocery thing just confounds me. I'm quite familiar with SoCal food prices, but every time I visit the exact same grocery chain in the Bay Area, everything costs more. Sometimes it's a few cents, other times, much more. And gas: If it's $2.69 in LA, it'll be near $3.00 in the Bay Area. Nuts.

It sounds believable, but I had to check it out and gasbuddy.com disagrees.
As of today, the price comparison for a gallon of regular are:
                 LA              SJ
average     2.56          2.36
lowest       2.15          1.91

I'm filling up for $1.99 at costco in the bay area and I just can't believe how low prices have fallen.

Wow! I'm only familiar with gas prices in the San Mateo-Menlo Park area, so that probably skews things.

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #45 on: February 17, 2016, 04:25:13 PM »
Yes, but only if you can find reasonable housing near your work, or a work situation that allows you to be remote at least half the time.

Also need to know your exact salary, along with any bonuses, stock, benefits, etc. $100,000 is very different from $500,000.

California has made me soft. I've only been here for three years, and just the thought of going back to Seattle rain makes me cringe. Nevertheless we know that if we want to retire early we cannot stay here :(

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Re: Can you be a Mustachian in Silicon Valley?
« Reply #46 on: February 24, 2016, 05:30:04 PM »
IMO "Quality of Life" is subjective.  What it means to me is the percentage of income required to live at the level that I am comfortable living. 
...
I think it is all relative but my personal quality of life has taken a huge hit.   More money goes to everyday living in what many would agree is a less comfortable lifestyle.
Now to be fair - I make more money here.  I commute less and I found my wife in CA.  That was a huge win.  But your dollar clearly goes a shorter distance here than most places.

Thanks for following up with your experience. I think that's a fair enough definition of quality of life.
We're using roughly the same definition, I think we disagree because at least for now we're living at a comfortable level and not spending too large a percentage of our income. Everyone's situation will be different, so thanks for answering my curiosity about what reduces the qualify of life for you.
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